ALLEGAN, Mich., Aug. 11 /PRNewswire-FirstCall/ -- The Perrigo Company (NASDAQ:PRGO) today announced results for the full year and fourth quarter ended June 28, 2003.
Fiscal Year 2003
Sales for the twelve months ended June 28, 2003 were $826.0 million compared with $826.3 million in fiscal 2002. Net income increased 21 percent to $54.0 million, or $0.76 per share, from $44.8 million or $0.60 per share last year. On an operating basis, excluding certain items in both years, net income was $52.0 million, or $0.73 per share in fiscal 2003, an increase in net income of 20 percent, compared with net income of $43.6 million, or $0.58 per share, for the prior year.
Reported net income in fiscal 2003 included after-tax income of $2.0 million, or $0.03 per share, from a vitamin litigation settlement. Reported net income in fiscal 2002 included after-tax income of $17.9 million, or $0.24 per share, from vitamin litigation and an after-tax charge of $16.6 million, or $0.22 per share, related to a restructuring of operations in Mexico.
Chief Executive Officer, David T. Gibbons, commented, "We are very pleased to report strong fiscal 2003 results which reflect Perrigo's progress in strengthening its fundamentals. Earnings were up more than 20 percent as we continue to realize the payback from the investments made in our quality processes and manufacturing operations over the past two years. Our increased operational efficiencies along with business simplification and expense control initiatives were key factors in the significant gain in gross profits and net earnings."
Mr. Gibbons continued, "We generated $80 million in cash from operations and stayed virtually debt-free, keeping us in a very strong financial position. This strong and predictable cash generation enabled us to repurchase 3.3 million shares during the year and allowed us to begin paying a cash dividend for the first time. In June, we began shipping the store brand version of Claritin-D(R) 24 Hour and look forward to providing additional store brand equivalents of this leading allergy relief product during fiscal 2004."
Fiscal 2003 Fourth Quarter
For the fourth quarter, sales were $182.6 million, a slight increase over sales of $182.0 million a year ago. Net income was $4.3 million, or $0.06 per share, compared with breakeven last year. On an operating basis, excluding certain items last year, net income was $3.7 million, or $0.05 per share. Reported net income included after-tax income of $12.9 million, or $0.17 per share, from vitamin litigation settlements and a charge of $16.6 million after-tax, or $0.22 per share, related to the restructuring of operations in Mexico.
Fiscal Year 2004 Outlook
Mr. Gibbons stated, "While we deliberately gave up some volume in fiscal 2003 to improve profits, as we look out to 2004 we see the opportunity for top-line growth. Our core over-the-counter (OTC) pharmaceutical and nutritional businesses remain strong, and with our new initiatives for growth we anticipate an increase in revenues of approximately three to five percent.
"In 2004, we will continue to build on our consumer pharmaceutical foundation as a focus for future growth. We are committed to continuing to enhance our mission of providing affordable consumer healthcare options. We now have the quality, R&D and manufacturing resources to expand our pharmaceutical business. Our strong financial position allows us to invest $5 to $7 million toward this initiative in 2004, primarily in increased R&D for the development of generic prescription drug products. Because of the anticipated eight to ten percent earnings growth and strong cash flow in our core business, we expect 2004 earnings to be at or slightly above current levels, despite this investment for our long-term growth. We see generic prescription drugs as a natural progression that will enhance our already strong position in the OTC pharmaceutical market and will provide substantial new growth.
"Implementing this new strategic direction requires a realignment of internal resources and our senior management structure. Effective immediately, John Hendrickson, Executive Vice President, Operations, will become Executive Vice President and General Manager, Perrigo Consumer Healthcare. In his new role, John will have responsibility for all functional operations within our OTC pharmaceutical and nutritional businesses. He has led our pursuit of operational excellence and has played a major role in Perrigo's strong results over the past few years.
"Mark Olesnavage, Executive Vice President, Sales, Marketing and Scientific Affairs, will become Executive Vice President and General Manager, Perrigo Pharmaceuticals. In this role, Mark will be responsible for the planning, development and execution of the launch and growth of our generic Rx drug efforts. He has an extensive background in marketing, operations and business development in 22 years with Perrigo and has worked extensively with our customers to bring them a wide range of product and service solutions to consumer healthcare. He also has been an active member of the Generic Pharmaceutical Industry Association Board over the last ten years. Both John and Mark will report directly to me."
With the fiscal second quarter ended December 28, 2002, Perrigo began expensing stock option compensation. All prior periods have been adjusted to reflect the compensation cost that would have been recognized had the stock option expense been applied to all awards granted after July 1, 1995. Please refer to the adjusted results in the summary table contained in this announcement.
The Company is furnishing this earnings release to the Securities and Exchange Commission via Form 8-K and it is hereby incorporated by reference. The information provided on Form 8-K includes a summary of each non-GAAP financial measure included in this earnings release and the reasons management believes these non-GAAP financial measures are useful to investors.
Perrigo Company is the nation's largest manufacturer of over-the-counter (non-prescription) pharmaceutical and nutritional products sold by supermarket, drug, and mass merchandise chains under their own labels. The Company's products include over-the-counter pharmaceuticals such as analgesics, cough and cold remedies, gastrointestinal, and feminine hygiene products, and nutritional products, such as vitamins, nutritional supplements and nutritional drinks. Visit Perrigo on the Internet (www.perrigo.com ).
Note: Certain statements in this press release are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and are subject to the safe harbor created thereby. These statements relate to future events or the Company's future financial performance and involve known and unknown risks, uncertainties and other factors that may cause the actual results, levels of activity, performance or achievements of the Company or its industry to be materially different from those expressed or implied by any forward-looking statements. In some cases, forward-looking statements can be identified by terminology such as "may," "will," "could," "would," "should," "expect," "plan," "anticipate," "intend," "believe," "estimate," "predict," "potential" or other comparable terminology. Please see the "Cautionary Note Regarding Forward-Looking Statements" on pages 23-27 of the Company's Form 10-K for the year ended June 29, 2002 for a discussion of certain important factors that relate to forward-looking statements contained in this press release. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, it can give no assurance that such expectations will prove to be correct. Unless otherwise required by applicable securities laws, the Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.